Reed Smith Client Alert

Authors: Peter Zaman Pryderi Diebschlag

Friday’s meetings continued the trend of informal consultations and contacts groups, slowing striving towards substantive progress. The closure of the 39th SBSTA and SBI meetings, and the associated closing plenaries, provided an excellent opportunity to assess precisely how much or how little substantive progress has been achieved thus far.

As expected, Japan duly announced its intention to cut its greenhouse gas emissions by 3.8% (from 2005 levels) by 2020. By comparison to Japan’s earlier goal of a 25% reduction from 1990 levels by 2020, this new target allows a 3.1% increase in emissions from 1990 levels. By way of justification, Japan points to a number of recent catastrophes, including the Fukushima disaster, as the reason for the revised emissions target. In spite of the expected criticism from China and the EU, among others, UNFCCC executive secretary Christiana Figueres stated that she has "some understanding" of the problems faced by Japan, but hopes that Japan "understands that investment in renewable energies galvanizes investments and creates new jobs". Perhaps to ease its criticism, Japan also announced plans to provide around $16 billion over the next three years to help developing countries tackle climate change.

With the EU on course to meet its goal of a 20% reduction in greenhouse gas emissions by 2020, there is now consideration of increasing that goal to a 40% reduction by 2030. Poland has made its opposition to such a move clear, citing its power industry, which is 90% dependent on coal.

President’s Informal Stocktaking Plenary

This session was convened by COP President H.E. Korolec. In general, the various bodies (SBSTA, SBI, AWG – DP) reported that although constructive discussions and progress had been made, more time was required to consider politically sensitive issues, inter alia, the various approaches to address loss and damage associated with climate change in developing countries.

Fiji, speaking on behalf of the G-77/China; Nauru, speaking on behalf of AOSIS; and Nepal, speaking on behalf of the LDCs, all agreed on the need to deliver on ‘loss and damage’.

The next stocktaking plenary convened today, 18 November 2013.

AWG – DP

Discussions focused on how capacity building can be reflected in the new international framework agreement which is meant to come into force in 2020 (the 2015 Agreement). Capacity building focuses on enhancing the ability of individuals, organizations and institutions in developing countries, and in countries with economies in transition, to identify, plan and implement ways to mitigate and adapt to climate change.

While the parties generally agree on the importance of capacity building within the 2015 Agreement, and while there were calls for a working group and/or a stand-alone body on capacity building, little was actually agreed.

The usual concerns were expressed by the G-77/China (among others) as regards the lack of funding for adaptation measures, and calls were made for the establishment of a global adaptation target. The United States, Australia, Norway and the Republic of Korea stressed the technical difficulty in quantifying such a global target. Consultation is set to continue.

As regards the Technology Mechanism (which facilitates the implementation of enhanced action on technology development and transfer to support action on Mitigation and Adaptation), the parties again agreed that this will be an important building block in the 2015 Agreement.

However, disagreement raged over implementation. While developing countries stressed the need for funding, developed nations continued to call for the promotion of international technology cooperation, with the protection of Intellectual Property Rights (IPRs) being critical for innovation.

SBI/SBSTA

The closing plenaries continued late into the night on Saturday, with the doors on the SBSTA finally snapping shut at almost 3 a.m. Sunday, and the SBI being forced to reconvene today after working until past 5 a.m. that morning. Given the late hour, it is unsurprising that some draft decisions were adopted for discussion by the COP itself; but while it is possible to see this as progress, experience suggests that these documents may only have jumped out of the frying pan and into the fire.

Prime examples are the adoption by the SBI of a text on modalities and procedures for the Clean Development Mechanism (CDM). In essence, this document sets out an agreement to reconvene for further discussions in Bonn, in 2014. With luck, those talks will not suffer the difficulties of the equivalent 2013 talks which were derailed by Russian protests.

Positives can be seen from an agreement to prepare a technical paper for discussion in Bonn, covering the following issues, among others:

  1. CDM Executive Board – its membership, composition and potential involvement of the private sector (perhaps an unsurprising outcome given that this is the first year to involve the private sector)
  2. Liability of Designated Operational Entities (DOE) – DOEs function as independent auditors accredited by the CDM Executive Board to validate project proposals and verify whether implemented projects have achieved planned greenhouse gas emission reductions. The question arises as to who should bear liability in the situation where the DOE validates or verifies certified emission reductions for projects with deficiencies in validation, verification and certification reports.
  3. Reducing the duration of the crediting period for CERs

In some ways, the SBSTA closing plenary was more frustrating. The texts that were under discussion during the week relating to the framework for various approaches (FVA) and potential new market mechanisms (NMM) were effectively withdrawn, also pending discussion in Bonn in the 2014. A glimmer of hope for progress on this issue at the current COP does, however, remain, as the text is also now in the hands of the COP President, who may continue to debate it over the coming days.

Discussions also took place with regards to REDD+, where parties discussed a text urging developed countries and relevant international organisations to support the development and assessment of forest reference emission levels. However, the much-awaited decision on monitoring, reporting and verification of emissions reductions achieved via REDD+ projects remains outstanding.

In relation to the 2013-2015 review (which is the long-term global goal to reduce greenhouse gases (GHG) emissions so as to hold the increase in global average temperature below 2°C above pre-industrial levels), parties concluded, inter alia, that further meetings of the structured expert dialogue (established in 2012 by the COP to support the work of the SBSTA and SBI, and to ensure the scientific integrity of the review through a focused exchange of views, information and ideas) are to occur in 2014.

Discussion on the report of the Adaptation Committee (established under the Cancun Adaptation Framework) covering its work between December 2012 and October 2013, focused on the shortfall in resourcing and encouraging parties to make available sufficient resources. Agreement was reached on a text to be forwarded to the COP.

Conclusion

With the first week of the conference over, limited progress has been made. Parties continue with their posturing on the various issues, with division becoming clear on subjects including loss and damage, historical responsibility, mitigation, and funding for the US$100 billion target by 2020. With ministers set to arrive this week, there is likely to be increasing pressure to look forward and reach agreements of substance on the road map to Paris. Certainly, if the rumours we are hearing of today’s activities are true, there will be more to report in the coming days.

Client Alert 2013-308